In early 2024, McDonald’s reported a 1% drop in sales, a stark contrast to years of growth.
Public frustration grows as prices soar, with many customers unable to afford meals on minimum wage.
In a survey, 62% of 2,000 Americans reported cutting back on fast food due to high prices.
Rising Costs
A Big Mac alone now costs $5.99 on average, with prices higher in states like Hawaii ($7.39).
Total meal costs (Big Mac, fries, soda) approach $10.47, nearly an hour and a half's worth of minimum wage work.
Comparison to 2009: Big Mac was $3.57 when the federal minimum wage was $7.25.
Fast food prices have surged faster than sit-down restaurants and supermarkets.
Business Decisions
McDonald’s raised prices to counteract declining customer numbers, creating a cycle of rising costs and decreasing patronage.
Prices increased more than inflation: 83% for McNuggets compared to 31% inflation.
CEO Chris Kempczinski acknowledged that eating at home is more affordable.
Technological Missteps
McDonald’s invested $1 billion in AI drive-thru systems, which were ineffective and caused order errors.
AI mistakes alienated customers, and by July 2024, McDonald's retracted the technology.
Quality and Speed Issues
Fast casual dining with fresher options lured away young customers.
Switch to fresh patties for Quarter Pounders increased wait times, degrading the "fast" in fast food.
Since 2012, McDonald’s lost 500 million visits to competitors.
Health and Transparency
Calorie counts added to menus in 2012 discouraged health-conscious customers.
Example: Big Mac meal with fries and Coke totals 1,000 calories.
Customer Satisfaction
McDonald's ranked last in customer satisfaction among fast food and full-service restaurants in 2023 and 2024 surveys.
Key complaints: long waits, incorrect orders, and poor food quality.
Competition from Sit-down Restaurants
Price comparisons show sit-down restaurants like Chili’s offer better value: larger, tastier portions at similar prices.
Example: Chili’s "3 For Me" deal provides a larger burger, bottomless chips, and a drink for $10.99, competing directly with McDonald’s Big Mac meal pricing.
Conclusion
McDonald's struggles with high prices, poor service, and fierce competition from both fast-casual and sit-down restaurants contribute to its declining appeal.
The company's focus may need to shift towards improving quality, affordability, and customer experience to regain lost ground.